Temporary Facilities – Time Extensions

Appeal Brief

Summary Paragraph

In October 2015, record rains overwhelmed the roof-mounted drains of the Williamsburg Regional Hospital (Applicant), allowing water to enter the hospital and damage the interior.  In February 2016, the South Carolina Department of Health and Environmental Control ordered a controlled closure of the hospital due to mold and asbestos contamination.  FEMA obligated project worksheets (PWs) to fund permanent repair of the hospital (PW 718) and for temporary hospital (PW 828) and operating room (PW 1106) facilities.  Following four time extensions for the PW 828 temporary facilities and one time extension for the PW 1106 facilities, FEMA denied additional time extensions for the temporary facilities beyond June 30, 2018, stating that no progress was being made on the approved scope of work (SOW) for PW 718 and that the estimated time for completion of that SOW, 24 months, had elapsed.  The Applicant filed a first appeal, stating that extenuating circumstances including delays in construction of a new hospital, delays due to their appeal of FEMA’s PW 718 determination, and funding shortfalls were extenuating circumstances justifying further extensions.  The Regional Administrator (RA) denied the appeal, finding that the relevant timeframe for temporary facilities is the time to complete repairs, even where an applicant pursues an improved project, and that the repairs could have been accomplished in the period for which temporary facilities were funded.  The Applicant filed a second appeal of FEMA’s decision, reasserting that extenuating circumstances outside its control prohibited accomplishment of the SOW of PW 718 and justify additional time extensions on PW 828 and PW 1106.

Authorities and Second Appeals

• Stafford Act § 403(a)(3)(D).
• 44 C.F.R. § 206.204, 206.225, 206.226.
• Public Assistance Guide, FEMA 322, at 32.
• DAP 9523.3, Provision of Temporary Relocation Facilities.
• Hancock County Board of Supervisors, FEMA-1604-DR-MS; City of Springfield, FEMA-1994-DR-MA; Williamsburg Regional Hospital, PW 718, FEMA-4241-DR-SC; City of Tallahassee, FEMA-1785-DR-FL.

Headnotes

• DAP 9523.3 states that FEMA may grant time extensions based on documentation showing: (1) circumstances beyond the Applicant’s control that prevented completion of the reconstruction project within the initial time limit, (2) status of the permanent restorative work, and (3) revised timeline for project completion.
  • The circumstances that the Applicant states were beyond its control, do not justify its delay in completing the approved repair work to the hospital.  Since the Applicant has not made significant progress toward effectuating the repair work approved in PW 718, and the estimated time to complete the authorized work has elapsed, FEMA denies the request for additional time extensions for PWs 828 and 1106.

Conclusion

The Applicant has not demonstrated circumstances beyond its control prevented completion of PW 718’s approved SOW.  Accordingly, FEMA denies the appeal for additional time extensions for PWs 828 and 1106.

Appeal Letter

Appeal Analysis

Background

In October 2015, record rains overwhelmed the roof-mounted drains of the Williamsburg Regional Hospital (Applicant), allowing water to enter the hospital and damage the interior.  In February 2016, the South Carolina Department of Health and Environmental Control (SCDHEC) ordered a controlled closure of the hospital due to mold and asbestos contamination.  FEMA obligated project worksheets (PWs) to fund permanent repairs of the hospital (PW 718) and to approve temporary hospital (PW 828) and operating room (OR) facilities (PW 1106).  FEMA and the Applicant disagreed over the scope of work (SOW) for PW 718, with the Applicant filing an appeal to fund replacement rather than repair costs.  FEMA granted four time extensions for PW 828 and one time extension for PW 1106 and obligated $12,061,372.02 in total funding for both PWs.  After funding the temporary facilities for longer than the estimated time to complete the repairs authorized by PW 718, FEMA denied the Applicant’s request for additional time extensions, ending the funding period on June 30, 2018. 

First Appeal

The Applicant appealed the time extension denial to the South Carolina Emergency Management Division (Grantee) on August 28, 2018.  The Applicant stated it could not repair the hospital due to the SCDHEC closure; that the funding for the temporary facilities should be extended during the appeal of PW 718; and that delays in the construction of a new hospital[1] are all extenuating circumstances beyond its control, justifying extensions of PWs 828 and 1106.  The Grantee forwarded the first appeal to FEMA with a letter expressing its support on August 29, 2018. 

On November 16, 2018, FEMA issued a Final Request for Information (RFI) to the Applicant.  FEMA sought documentation of the dates and amounts of funding requested, insurance settlement payments, and timelines of both the new hospital construction and the temporary facilities funded in PWs 828 and 1106.  The Applicant responded to the RFI on December 14, 2018.  The Applicant clarified the amount and time appealed, stated that no insurance proceeds were allocated for temporary hospital facilities, and provided the requested timeline for both new hospital construction and the temporary facilities.

FEMA Region IV denied the Applicant’s appeal on March 25, 2019.  The Regional Administrator (RA) found that the Applicant had made no progress on the approved SOW, i.e., the hospital repairs, and that the relevant timeframe for funding the temporary facilities had elapsed.  As the Applicant had not demonstrated extenuating circumstances beyond its control prevented it from completing the repairs, the RA denied the time extension request.

Second Appeal

In its second appeal, dated May 23, 2019, the Applicant argues that SCDHEC prohibited repair of the hospital and therefore the Applicant had no choice but to replace it.  The Applicant asserts that extenuating circumstances, including: (1) the extent of the damage from the disaster; (2) the repairs being infeasible; (3) delays in the construction of the new hospital; (4) the appeal of PW 718; and (5) the Applicant’s financial hardships following the disaster, justify further time extensions. 

Discussion

Section 403(a)(3)(D) of the Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act[2] authorizes Public Assistance funding for “provision of temporary facilities for schools and other essential community services.”  Temporary facilities are considered emergency protective measures.[3]  Title 44 Code of Federal Regulations § 206.204(c)(1) generally limits emergency work to six months from the date the disaster is declared, but this can be adjusted depending on the time required to complete repairs of the permanent facility.[4]  The Grantee may extend the deadlines for emergency work an additional six months where extenuating circumstances or unusual project requirements beyond the control of the subgrantee exist.[5]   Requests for time extensions beyond the Grantee’s authority are submitted, by the Grantee, to the Regional Administrator.[6]  Consistent with this requirement, the Grantee may recommend that FEMA grant a time extension based on documentation showing: (1) circumstances beyond the Applicant’s control that prevented completion of the reconstruction project within the initial time limit, (2) status of the permanent restorative work, and (3) revised timeline for project completion.[7]  FEMA may not grant extensions without this documentation.[8]  With the proper documentation, FEMA may grant extensions to the temporary facility for the projected duration of the damaged facility’s construction work.[9]  When an applicant chooses to complete an improved project, FEMA policy allows funding for temporary facilities only for the time necessary to complete the approved SOW.[10] 

FEMA initially drafted, but did not obligate, PW 718 for a replacement hospital under “the 50 percent rule”[11] in March of 2016, when it was unable to perform a full site inspection.  In June 2016, following further site inspections, FEMA revised the SOW to include only repairs, not replacement costs.  FEMA obligated PW 718 for hospital repairs on March 16, 2017, after which the Applicant appealed FEMA’s decision.  FEMA has affirmed the denial of replacement costs for PW 718 in a separate second appeal decision.[12]

FEMA approved a SOW in PW 718 that included permanent repairs, not replacement, of the hospital, with a 24-month estimated completion timeframe.[13]  Consequently, under PW 828, FEMA obligated an initial $2,200,097.25 toward the temporary hospital on May 3, 2016.  The Applicant’s temporary hospital facility opened in December 2016.  FEMA obligated $655,701.03 for the Applicant’s temporary OR on January 17, 2018 under PW 1106.  The temporary OR opened in August 2017 and the initial funding covered costs from the opening through April 2018.  FEMA approved four extensions to PW 828, totaling almost 21 additional months, at a cost of $8,947,825.87.  FEMA also approved one extension to PW 1106 for 2 months, at a cost of $257,847.87.  As the Applicant made no progress in completing the hospital repairs, FEMA denied further extensions to the temporary facilities funding after June 30, 2018.

The Applicant argues that FEMA’s original PW 718 draft, authorizing replacement rather than repairs, and its appeal of the allegedly incorrect SOW delayed completion of the hospital restoration.  The Applicant made no significant progress toward completing the approved scope of work for repairs to the hospital, and has acknowledged it plans to construct a replacement hospital regardless of FEMA’s decision in the appeal of PW 718.  It has submitted a request for an improved project, which has not yet been approved.  Even if approved, FEMA does not fund temporary facilities for the time necessary to complete an improved project.[14

The disaster caused damage to the hospital due to rainwater leaking through the nearly flat rooftop.  The disaster itself is not, however, an extenuating circumstance but one for which FEMA and the Applicant accounted during project development.  The Applicant states that repair of the hospital was not feasible, both because of the extent of the damage and the SCDHEC evacuation order.  The Applicant cites FEMA’s decision in City of Tallahassee,[15] where the city submitted a certification by the engineer of record that they would not permit point repairs of the damaged sewer system.  Here, the Applicant has submitted no evidence that it could not accomplish the repairs, either from a technical or permitting perspective.  Permitting for the new hospital, including meeting necessary Environmental and Historic Preservation (EHP) requirements, is not an extenuating circumstance to the accomplishment of the repairs contemplated by PW 718.

Finally, the Applicant points to a financial hardship as an extenuating circumstance to justify its delay in completing PW 718.  A contractor proposed in January 2016 to accomplish the necessary mold remediation and asbestos abatement work at a cost of $1,922,830.92.[16]  The Applicant received approximately $5 million in insurance advance payments between November 2015 and March 2016,[17] and the administrative record reflects total insurance payments in excess of $28,000,000.00 before FEMA obligated PW 718.  This indicates the Applicant’s financial capability to accomplish repairs using its insurance proceeds.

The Applicant’s stated extenuating circumstances do not justify additional time extensions.  Because the Applicant has not made significant progress toward effectuating the repair work and the estimated time to complete the authorized work has elapsed, the request for additional time extensions for PWs 828 and 1106 is not warrented. 

Conclusion

The Applicant has not demonstrated circumstances beyond its control prevented completion of PW 718’s approved SOW.  Accordingly, FEMA denies the appeal for additional time extensions for PWs 828 and 1106.